METALS-Copper slips from 16-month high as traders book profits

By Pratima Desai

LONDON, Oct 6 (Reuters) - Copper prices slid on Monday after hitting 16-month highs earlier in the session as profit-taking triggered by a firmer dollar outweighed concerns about supplies from Chile and Indonesia.

Benchmark copper CMCU3 was down 0.6% at $10,655 a metric ton at 1605, having touched its highest since May at $10,800. Monday's peak represents a gain of nearly 25% since early April.

Traders said part of the reason for copper's rapid climb since late last week has been the absence of the Chinese market during the Golden Week holiday. Chinese players have sold LME copper many times during the latest rally.

But the strengthening U.S. currency, making dollar-priced metals more expensive for buyers with other currencies, prompted some traders and funds to square long positions betting on higher prices, traders said.

However, suspended operations at Freeport-McMoRan's FCX.N Grasberg operation in Indonesia after a mudslide and other disruptions this year, including Kamoa-Kakula in the Democratic Republic of Congo and Chile's El Teniente mine, mean worries about supplies are expected to persist.

"While we are bullish on copper prices versus historical averages ... we believe that there is a ceiling at $11,000 for the coming two years," Goldman Sachs analysts said in a note.

"The copper market is currently in a modest surplus, which we expect to be maintained in 2026, even after a significant drop in global refined output following recent mine disruptions. We do not see a deficit materialising until the end of the decade."

Focus was also on lead stored in LME-registered warehouses, specifically cancelled warrants or metal earmarked for delivery, 0#MPBSTX-LOC which at 22% mean more than 30,000 tons of the battery metal could leave the LME system.

The cancellation last week narrowed the discount for the cash contract over the three-month forward CMPB0-3. Three-month lead CMPB3 was down 0.8% at $2,004 a ton.

In other metals, aluminium CMAL3 gained 0.6% to $2,725 a ton, zinc CMZN3 lost 0.8% to $3,009, tin CMSN3 retreated 1.9% to $36,750 and nickel CMNI3 rose 0.3% to $15,480.